Social Security Delayed Retirement Credits (DRCs) and the January crediting date

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ezpath
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Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by ezpath »

[Topic is now in Personal Finance (Not Investing) - mod mkc]

Question (labeled) much further below, if you want to skip the background/experiences.

Thanks to the many experts on this forum, I believe I have learned a lot about the mechanics of Social Security benefits. Thanks of course to Mike Piper, obliviousinvestor, for his books and his web site https://opensocialsecurity.com/. Thanks to contributor gregable for https://ssa.tools/. And thanks to Chip Munk for repeatedly supplying clarification concerning the math involved.

I am writing about the January crediting date for DRCs referenced here: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300615690

Background: About a dozen years ago, shortly before I discovered Bogleheads, I started planning DW and my retirement in earnest. It was a bit of a revelation when I discovered we didn’t have to file for Social Security benefits when we quit our jobs, and that there would be a financial benefit to wait. In my naivete, I remember thinking is that even allowed?

But then began our efforts to fund a Social Security makeup fund in taxable in order to allow us both to delay until 70. The first step was to gather detailed information on what we spend. IMO, it is highly important to understand actual spending prior to retirement and to not rely on blanket projections. I was able to capture a number of years of detailed spending which I tracked in spreadsheets and developed some bucketing automation (primitive stuff, but helpful).

We saved primarily into CD ladders with first year/current year in an online HYS account. It was a good time to save: relatively high salaries compared to younger years, no mortgage, and college savings completed. Upon retirement I set up automatic monthly transfers from the HYS to our checking account. This kept budgeting feeling somewhat "normal" when we did retire.

Fast forward 12 years. We have now been retired for five years. We have significantly underspent our projected spending. This might be due to the fact we retired into the Covid period.

DW has claimed her age 70 benefit. Indeed, that was satisfying. We applied online. The process worked great! We followed the wording template that contributor workingfornow supplied here: viewtopic.php?t=384197. We had no calls from SSA. Just a few days after submitting the online application the status showed approved. There was no further communication for nearly three months until a few days into her claiming/birth month. On the second day of her birth month a more formal approval appeared online and this was followed up by a USPS letter about five days later. Again, the process was great, satisfying, with some additional sweetness as our credit union deposits the amount on the Friday before the scheduled Wednesday payment date.

That leaves me. My age 70 is not until 2025. However, opensocialsecurity, due to higher discount rates, has been showing for me that at or near my 69th birthday would be optimal. I am fortunate that my DRC is relatively high, about $25/month, $300/year. But, I am now sold that it would be beneficial for me to claim sooner versus fully waiting to age 70.

I understand the one-time loss of DRCs as described (by Mike) here: viewtopic.php?p=6672263&hilit=January#p6672263
I am looking, based on choice, at a one-time loss of 4 (months) X $200, 3 X $225, 2 X $250, or 1 X $275 (by claiming September through December this year). Over the course of a lifetime not likely very consequential….

My Question:

By claiming in the later part of the year I understand that I’ll have the one-time loss. The rub, that I see, is that even being patient and waiting for the subsequent credit bump in January, it may not automatically happen. Several forum contributors have reported that they did not automatically receive the January bump. They reported that the bump was delayed, for quite some time, and that it took repeated calls, and/or visits, to SSA to make it right. AFAIK, all eventually received the bump and any back amounts that were due. But it does sound like it can be a hassle.

Perhaps the problematic January crediting mostly occurred during the COVID years? Have others had the January crediting problem? Or were you automatically credited—is this the vast majority case?

Appreciate feedback as it has been hard to tell how significant this problem is.

Lastly: claiming in January, with payment in February, it should be the correct amount from the start. Has anyone had a contrary experience?
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

ezpath wrote: Thu Jul 04, 2024 11:20 am Lastly: claiming in January, with payment in February, it should be the correct amount from the start. Has anyone had a contrary experience?
Not here. Family member's benefit was exact to the dollar vs. what was expected.
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ezpath
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by ezpath »

Thank you, FiveK, for your feedback.
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jeffyscott
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by jeffyscott »

ezpath wrote: Thu Jul 04, 2024 11:20 am That leaves me. My age 70 is not until 2025. However, opensocialsecurity, due to higher discount rates, has been showing for me that at or near my 69th birthday would be optimal. I am fortunate that my DRC is relatively high, about $25/month, $300/year. But, I am now sold that it would be beneficial for me to claim sooner versus fully waiting to age 70.

I understand the one-time loss of DRCs as described (by Mike) here: viewtopic.php?p=6672263&hilit=January#p6672263
I am looking, based on choice, at a one-time loss of 4 (months) X $200, 3 X $225, 2 X $250, or 1 X $275 (by claiming September through December this year). Over the course of a lifetime not likely very consequential….
I don't know the answer to your question, but I would guess that delaying a few months to the following January (if you decide to do that to avoid potential hassles) would not be very consequential either. Have you compared the PV difference?

I get a similar result that optimal is a few months after 69. But delaying a few more months to January of the year I turn 70 only changes the PV by about $150. Open SS doesn't consider the loss of DRCs which I think would exceed that $150 even if it's only 1 month. So, while the differences are tiny, I think January is my actual optimal :?: (and, in my case, spouse on ACA will be a bigger reason for me to wait).
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by jebmke »

My determination letter (rcvd in December) had the wrong amount. While they may have caught up with it eventually, I elected to file an appeal. I received two payments in Feb. the “adjustment” amount followed by the wrong payment. The March payment was a single payment for the combined amount.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by EricGold »

All else being equal I would claim in December when I turn 70 but my wife's spousal benefit pushes me to an earlier date. I chose January to avoid this SS quirk of not applying DRCs mid year
ssel
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by ssel »

According to Social Security's Annual Statistical Supplement 2023, around 4% of new claims were from people aged 68 or 69. Another 4% were from people aged 67, so let's say roughly 5% of new claims will have some DRCs delayed until the following January. That's a small but not inconsequential number. While I do not doubt the actual experiences of people who did not get the increase applied on schedule, I find it hard to believe that there's some huge, systemic national problem in which 5% of retirees are getting cheated (with the vast majority no doubt unaware of the issue).

So while it might be frustrating to hear of actual problems people have had with this, it really seems like an overreaction to retire earlier that you had initially planned -- incidentally giving up those "missing DRCs" for sure, plus lowering your lifetime monthly benefit to boot -- just out of fear of possibly needing to contact the SS office and pointing out an error if one is made. Or going in the other direction, it similarly seems like an overreaction to do several months of work you otherwise wouldn't have, just to avoid the risk of possibly needing to make that same contact.
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Silentnight
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Silentnight »

I filed for benefits at age 68. I filed in March 2024 and received first deposit in April.
How many months of DRCs should I expect in 2025.
Two months, Jan and Feb since I filed in March
Three months, Jan and Feb, and also March since first benefit was received in April (for March).

I think it will be two months, Jan and Feb, but does anyone know for sure?
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Chip Munk
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

Silentnight wrote: Sat Jul 06, 2024 5:21 pm I filed for benefits at age 68. I filed in March 2024 and received first deposit in April.
How many months of DRCs should I expect in 2025.
Two months, Jan and Feb since I filed in March
Three months, Jan and Feb, and also March since first benefit was received in April (for March).

I think it will be two months, Jan and Feb, but does anyone know for sure?
If you started your benefit in March, then you are owed two DRCs (Jan + Feb).

It should play out like this: Your December 2024 benefit (paid to you in Jan 2025) will include the 2025 COLA. Then you should get another small increase the following month (your Jan 2025 benefit, paid in Feb 2025) equal to (.0133 * your 2025 PIA) for the two DRCs, but that second increase is the one that does not always happen on schedule. If they are late making that adjustment, they will eventually make you whole. You should call your local SSA office if you do not get the DRC adjustment in your Feb 2025 payment.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by EricGold »

Chip Munk wrote: Sat Jul 06, 2024 6:14 pm If you started your benefit in March, then you are owed two DRCs (Jan + Feb).

It should play out like this: Your December 2024 benefit (paid to you in Jan 2025) will include the 2025 COLA. Then you should get another small increase the following month (your Jan 2025 benefit, paid in Feb 2025) equal to (.0133 * your 2025 PIA) for the two DRCs, but that second increase is the one that does not always happen on schedule. If they are late making that adjustment, they will eventually make you whole. You should call your local SSA office if you do not get the DRC adjustment in your Feb 2025 payment.
Yeah, that makes sense to me. Which month does a person file for benefits (if not FRA or the month of the 70th birthday) to avoid a delayed payment of DRCs ?
Dec or Jan ?

I *think* January, but I'm having trouble being confident in my reasoning
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

EricGold wrote: Sat Jul 06, 2024 8:08 pm Yeah, that makes sense to me. Which month does a person file for benefits (if not FRA or the month of the 70th birthday) to avoid a delayed payment of DRCs ?
Dec or Jan ?

I *think* January, but I'm having trouble being confident in my reasoning
Benefits to begin in January, meaning the first payment comes in February.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by EricGold »

FiveK wrote: Sat Jul 06, 2024 8:46 pm
EricGold wrote: Sat Jul 06, 2024 8:08 pm Yeah, that makes sense to me. Which month does a person file for benefits (if not FRA or the month of the 70th birthday) to avoid a delayed payment of DRCs ?
Dec or Jan ?

I *think* January, but I'm having trouble being confident in my reasoning
Benefits to begin in January, meaning the first payment comes in February.
This is where I get tripped up. Is there a processing delay ? When do I walk into the SS office, when I want the benefits to begin in January ?
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Chip Munk
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

EricGold wrote: Sat Jul 06, 2024 9:03 pm
FiveK wrote: Sat Jul 06, 2024 8:46 pm
EricGold wrote: Sat Jul 06, 2024 8:08 pm Yeah, that makes sense to me. Which month does a person file for benefits (if not FRA or the month of the 70th birthday) to avoid a delayed payment of DRCs ?
Dec or Jan ?

I *think* January, but I'm having trouble being confident in my reasoning
Benefits to begin in January, meaning the first payment comes in February.
This is where I get tripped up. Is there a processing delay ? When do I walk into the SS office, when I want the benefits to begin in January ?
You can apply up to 4 months in advance. You can apply online, over the phone, or at your local SSA office (call first to make an appointment): https://www.ssa.gov/forms/ssa-1.html
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

EricGold wrote: Sat Jul 06, 2024 9:03 pm
FiveK wrote: Sat Jul 06, 2024 8:46 pm Benefits to begin in January, meaning the first payment comes in February.
This is where I get tripped up. Is there a processing delay ? When do I walk into the SS office, when I want the benefits to begin in January ?
No "delay", just the way it works. From https://www.ssa.gov/pubs/EN-05-10077.pdf,
We pay Social Security benefits monthly. The benefits are
paid in the month that follows the month for which they
are due. For example, you would receive your July benefit
in August.
From https://faq.ssa.gov/en-us/Topic/article/KA-01891,
You can apply for retirement benefits up to 4 months before you want to start receiving your benefits.
In other words, September of the previous year to start benefits in January (and to get the first payment in February).
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by EricGold »

^^ Understood, Thanks
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ezpath
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by ezpath »

ssel wrote: Sat Jul 06, 2024 1:06 pm According to Social Security's Annual Statistical Supplement 2023, around 4% of new claims were from people aged 68 or 69. Another 4% were from people aged 67, so let's say roughly 5% of new claims will have some DRCs delayed until the following January. That's a small but not inconsequential number.
Thank you for the data points. I feel a bit sheepish that I didn’t look for some actual data here. BTW, I didn’t mean to imply that folks were cheated—just that they may have been made to wait until the award amount was later corrected. Perhaps just more of an annoyance. I would imagine, for most folks who were unaware all along, that they were just happy to see an increase.

About the data: I was not aware of the report https://www.ssa.gov/policy/docs/statcomps/supplement/ .

Looking at Table 6.B5.1 (it is a large report, please let know if there is a more appropriate table), I see, for 2022, 1,580 thousand men were awardees. I see 1,563 thousand women. For men, 4.9% were awardees at 66, but after FRA. 7% were awardees between ages 67-69. For women, 4.2% were awardees at 66, but after FRA. 6.2% were awardees during ages 67-69. I compute about 350 thousand claimants for year 2022 that should be entitled to a DRC. Otherwise, it looks like the largest pools are before FRA, at FRA, or at 70.

Of the DRC candidates, if we assume some large amount know that January is a great time to claim—say 30%—about 105 thousand DRC eligible claimants will not need a later DRC correction. That leaves about 245 thousand claimants per year needing DRC correction.

So, I see and take your point about this likely not being a large problem. Thanks for the data driven point of view (if I got it right).

In any case, I am concurring that it is not so big a deal and shouldn’t, in general, influence folks decision on when (calendar month) to claim.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Silentnight »

Chip Munk wrote: Sat Jul 06, 2024 6:14 pm
Silentnight wrote: Sat Jul 06, 2024 5:21 pm I filed for benefits at age 68. I filed in March 2024 and received first deposit in April.
How many months of DRCs should I expect in 2025.
Two months, Jan and Feb since I filed in March
Three months, Jan and Feb, and also March since first benefit was received in April (for March).

I think it will be two months, Jan and Feb, but does anyone know for sure?
If you started your benefit in March, then you are owed two DRCs (Jan + Feb).

It should play out like this: Your December 2024 benefit (paid to you in Jan 2025) will include the 2025 COLA. Then you should get another small increase the following month (your Jan 2025 benefit, paid in Feb 2025) equal to (.0133 * your 2025 PIA) for the two DRCs, but that second increase is the one that does not always happen on schedule. If they are late making that adjustment, they will eventually make you whole. You should call your local SSA office if you do not get the DRC adjustment in your Feb 2025 payment.
Thanks Chip Munk.
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

Chip Munk wrote: Sat Jul 06, 2024 6:14 pm If you started your benefit in March, then you are owed two DRCs (Jan + Feb).
I've seen posts from people who say they eventually received the "missed" DRCs, but also posts saying The "missed" amount is not received later as a lump sum, because you're not supposed to get that amount.

Don't have any first-person experience to comment one way or the other.
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Chip Munk
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

FiveK wrote: Mon Jul 08, 2024 5:36 pm
Chip Munk wrote: Sat Jul 06, 2024 6:14 pm If you started your benefit in March, then you are owed two DRCs (Jan + Feb).
I've seen posts from people who say they eventually received the "missed" DRCs, but also posts saying The "missed" amount is not received later as a lump sum, because you're not supposed to get that amount.

Don't have any first-person experience to comment one way or the other.
In this situation (you claim in a month other than January, you are over FRA and you don't turn 70 that same year), you have earned some DRCs that year, but they are not included in your benefit calculation that first year. You will not be made whole for the "shortfall" because in the eyes of the SSA, you were never due that money in the first place since it is their policy to credit those final DRCs in January of the following year, not month by month as they are earned.

You are due to receive credit for those final DRCs the following January. However, the SSA is not always prompt about doing so. It can take a few months for you to receive credit for those final DRCs and for your benefit to be updated. Any shortfall in this case (back to January) is due to be paid to you.

If you don't see the benefit increase in the February payment (for the Jan benefit), in my opinion you should call your local SSA office to nudge them about it. I've personally experienced situations where something was supposed to happen automatically but didn't until I called my local SSA office to bring it to their attention.
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

Chip Munk wrote: Mon Jul 08, 2024 8:52 pm In this situation (you claim in a month other than January, you are over FRA and you don't turn 70 that same year), you have earned some DRCs that year, but they are not included in your benefit calculation that first year. You will not be made whole for the "shortfall" because in the eyes of the SSA, you were never due that money in the first place since it is their policy to credit those final DRCs in January of the following year, not month by month as they are earned.
OK, so no lump sum for that first year - not then, not ever.
You are due to receive credit for those final DRCs the following January. However, the SSA is not always prompt about doing so. It can take a few months for you to receive credit for those final DRCs and for your benefit to be updated. Any shortfall in this case (back to January) is due to be paid to you.
So, eventually, the monthly amounts will increase due to the DRCs (and there may be a lump sum catch-up), but only after the following January and the first year's lost DRCs remain lost forever.

Is that it?
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Chip Munk
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

FiveK wrote: Mon Jul 08, 2024 9:23 pm
Chip Munk wrote: Mon Jul 08, 2024 8:52 pm In this situation (you claim in a month other than January, you are over FRA and you don't turn 70 that same year), you have earned some DRCs that year, but they are not included in your benefit calculation that first year. You will not be made whole for the "shortfall" because in the eyes of the SSA, you were never due that money in the first place since it is their policy to credit those final DRCs in January of the following year, not month by month as they are earned.
OK, so no lump sum for that first year - not then, not ever.
You are due to receive credit for those final DRCs the following January. However, the SSA is not always prompt about doing so. It can take a few months for you to receive credit for those final DRCs and for your benefit to be updated. Any shortfall in this case (back to January) is due to be paid to you.
So, eventually, the monthly amounts will increase due to the DRCs (and there may be a lump sum catch-up), but only after the following January and the first year's lost DRCs remain lost forever.

Is that it?
Yes.

Example: John is 68 and starts his benefit this month, July 2024. He has earned 6 DRCs for Jan-Jun 2024 but his benefit for Jul-Dec 2024 won't include them. He will never receive any compensation for the shortfall of his benefits for Jul-Dec 2024.

He should be credited with those 6 DRCs in January 2025 and his benefit should increase by 4% of his 2025 PIA (each DRC is worth 2/3 of 1%, so 6 DRCs is worth 4%). He should see that increase in his January benefit that he receives in February. If the SSA is slow and doesn't recalculate his benefit until March 2025, they will make good on the shortfall for Jan and Feb.

Things play out differently if you claim between FRA and age 70, but you turn 70 later that same year. You should be credited with all remaining DRCs in the month you turn 70 and your benefit should increase beginning that month rather than waiting until the following January.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Zippfitte »

I'm curious about a slightly different claiming option.

70th birthday in January 2027.
I am holding off claiming until 70 even as the lower earning spouse in order to maximize Roth conversions, but have thought I'd claim in January for retroactive 6 months. So, effectively claiming at 69.5 but paid in the 2027 tax year. I understand that I will not have earned nor receive DRCs for those 6 months. Will there be any permanently lost DRC's?
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

Zippfitte wrote: Tue Jul 09, 2024 8:10 am I'm curious about a slightly different claiming option.

70th birthday in January 2027.
I am holding off claiming until 70 even as the lower earning spouse in order to maximize Roth conversions, but have thought I'd claim in January for retroactive 6 months. So, effectively claiming at 69.5 but paid in the 2027 tax year. I understand that I will not have earned nor receive DRCs for those 6 months. Will there be any permanently lost DRC's?
Fortunately nobody permanently loses DRCs. The issue is that they are not credited to you month by month as you might expect. I expect things will go as I described in the example I included in my previous post, in other words, I don't think things will play out any differently because you will be 70 at the time you submit your retroactive application.

You were born in 1957 so you reached your FRA (age 66 yr and 6 mo) in July 2023. In Jan 2027, you plan to claim retroactively to July 2026 which is 36 months after your FRA. You will have earned 36 DRCs by Jul 2026, but will have been credited with only 30 of them as of Jan 2026 so that is the number used to determine your benefits in 2026. Your benefit payments for Jul-Nov 2026 will be:
(1 + (30 * 2/3 * 1%)) * Your 2026 PIA = (1.2 * Your 2026 PIA).

If there is a COLA for 2027, your PIA will be recalculated to include that adjustment. It applies starting with your Dec 2026 benefit (paid to you in Jan 2027) but again only 30 DRCs have been credited at this point, so your benefit for that one month will be:
(1.2 * Your 2027 PIA).

In Jan 2027, you are due to be credited with the 6 DRCs earned for Jan-Jun 2026, bringing your total DRCs to 36. Your benefit starting in Jan 2027 (paid to you starting in Feb 2027) will be:
(1 + (36 * 2/3 * 1%)) * Your 2027 PIA = (1.24 * Your 2027 PIA).

It turns out claiming retroactively to July results in the largest shortfall. Again, you only incur this shortfall the first year. If you want to calculate the loss for any given claiming month, the shortfall formula is:

(0.02/3) * PIA * (14M - M^2 -13) where M is the month benefits begin (Jan=1, ..., Dec=12), and (0.02/3) * PIA is the value of one DRC.

Example: If your PIA is $1,500 then the value of one DRC is 0.02 * 1500 / 3 = $10. Claiming retroactively to July results in a shortfall of:
$10 * (98 - 49 - 13) = $360. (You are shortchanged by 6 DRCs for 6 months * $10/DRC.)

Knowing July results in the largest shortfall didn't deter me from choosing it to start my retroactive benefit a few years ago because I had other, very good reasons for doing so. I had calculated my benefit amounts as described above and was relieved when I received my lump sum benefit letter and my numbers were in agreement with those calculated by the SSA.
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

Chip Munk wrote: Tue Jul 09, 2024 1:12 pm Fortunately nobody permanently loses DRCs.
Except for the first year's worth...? Because:
It turns out claiming retroactively to July results in the largest shortfall
That is, if I understand all the semantics....
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Chip Munk »

FiveK wrote: Tue Jul 09, 2024 2:19 pm
Chip Munk wrote: Tue Jul 09, 2024 1:12 pm Fortunately nobody permanently loses DRCs.
Except for the first year's worth...? Because:
It turns out claiming retroactively to July results in the largest shortfall
That is, if I understand all the semantics....
In the previous poster's situation, the 6 DRCs earned for Jan-Jun 2026 are eventually awarded in Jan 2027 so I wouldn't describe them as permanently lost. One does lose out on the benefit dollars from those 6 delayed DRCs in their claiming year.

I didn't want anyone to think that they would never get those final 6 DRCs which is what I thought Zippfitte was asking.
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by jeffyscott »

FiveK wrote: Tue Jul 09, 2024 2:19 pm
Chip Munk wrote: Tue Jul 09, 2024 1:12 pm Fortunately nobody permanently loses DRCs.
Except for the first year's worth...?
To state this another way: You get a lower benefit than what it would seem logical to think you are entitled to for a few months, you don't get a permanently lower benefit.

The detailed post by Mike Piper that was linked to in the OP made this all perfectly clear to me, but I see you posted there, so must've already read it:

Filing for your benefit to begin in January (received in Feb) means that no months are "missed."

Here's how it plays out, month by month (if you don't turn 70 in the year in question)
...

So by this standard, January is best, and July is worst. But the difference is only 24% of your PIA.

viewtopic.php?p=6672263#p6672263
Last edited by jeffyscott on Tue Jul 09, 2024 5:07 pm, edited 1 time in total.
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FiveK
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Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by FiveK »

Many people associate the word "credit" with "dollars". E.g., saver's credit, earned income credit, education credit, etc.

With that in mind, when people hear that "credits aren't lost," many think that they will get a lump sum payment to make them whole for the dollars they didn't receive (e.g., 6 months worth if benefits began in July).

The difference between "getting paid at a higher monthly rate after the missed DRCs are eventually applied" vs. "getting a lump sum for the extra payments that would have been received had DRCs been applied coincident with the start of benefits" is not well understood.

Adding to the confusion, some people have posted (not in this thread) that "yes, I received a lump sum to make up for DRCs I missed" (or words to that effect).
Zippfitte
Posts: 15
Joined: Mon May 09, 2022 10:48 pm

Re: Social Security Delayed Retirement Credits (DRCs) and the January crediting date

Post by Zippfitte »

FiveK, jeffyscott and Chip Munk,

Thank you all for all the calculations and descriptions. I do believe I've got it now.

Z
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